Vivek Kan­nan, COO, DHFL, elab­o­rates on the com­pany’s plans to be an ac­tive par­tic­i­pant in the ‘Hous­ing for All by 2022’ plan:

N. Mo­han: DHFL brings cer­tain val­ues to its cus­tomers, based on their in­di­vid­ual needs, fi­nan­cial sta­tus etc. Can you elab­o­rate?

Vivek Kan­nan: Over the past 34 years, DHFL has been at the fore­front of en­abling home own­er­ship dreams of the lower and mid­dle in­come (LMI) seg­ments in tier 2 and 3 towns. We are se­cur­ing our cus­tomers’ fu­ture by ac­tively ad­dress­ing their fi­nan­cial needs through our diver­si­fied prod­uct of­fer­ings, while cre­at­ing fi­nan­cial aware­ness. With an ever ex­pand­ing fo­cus on fi­nan­cial in­clu­sion and build­ing a stronger ecosys­tem for tomorrow, we are now re­in­forc­ing our com­mit­ment to­wards trans­form­ing the lives of the com­mon man. Led by an in-depth un­der­stand­ing of our cus­tomers’ af­ford­able hous­ing fi­nance needs com­bined with our time-tested ex­per­tise in this space, we are proud of our mission of ‘Giv­ing In­dia a Home’, which res­onates with the gov­ern­ment’s na­tional mission of ‘Hous­ing for All by 2022’. To­day, we stand strong as an in­sti­tu­tion that is com­mit­ted to the mission of ‘Giv­ing In­dia a Home’ and pro­vid­ing fi­nan­cial se­cu­rity to the so­ci­ety it serves.

You are pri­mar­ily tar­get­ing the af­ford­able hous­ing needs of lower and mid­dle in­come groups, espe­cially in the semi-ur­ban and ru­ral ar­eas. How do you man­age to treat these cus­tomers dif­fer­ently?

In our en­deavor to­wards sup­port­ing an eq­ui­table world and driv­ing fi­nan­cial in­clu­sion across In­dia, we have es­tab­lished a wide dis­tri­bu­tion net­work across tier II and III towns. This is the real ‘Bharat’ that DHFL is mak­ing a deep im­pact on – with ef­forts to­wards giv­ing In­dia a se­cured fu­ture through its com­mon peo­ple. As we ex­pand into new ter­ri­to­ries of growth, we cre­ate more touch points through mi­cro­branches, ease sys­tems and pro­cesses and thus, en­hance cus­tomer ser­vice and ex­pe­ri­ence at every step of their en­gage­ment with us. Our deep un­der­stand­ing of our cus­tomers’ as­pi­ra­tions en­able us to see every lim­i­ta­tion as an op­por­tu­nity. Thus, even as we en­hance our prod­uct port­fo­lio to meet their af­ford­able hous­ing needs, we si­mul­ta­ne­ously drive fi­nan­cial aware­ness. Re­in­forc­ing our 34-year-old vi­sion and sup­port­ing the na­tional mission, we launched a unique ini­tia­tive ‘Griha Ut­sav’, a first-of-its-kind hous­ing expo in tier II and III towns bring­ing prospec­tive home buy­ers and de­vel­op­ers un­der one roof to pro­vide af­ford­able hous­ing and fi­nance so­lu­tions to our tar­get LMI group. We also ef­fec­tively lever­age a host of dig­i­tal-cen­tric ini­tia­tives to en­hance cus­tomer ex­pe­ri­ence through re­duced turn­around time and im­proved ef­fi­cien­cies. As an in­dus­try thought leader in driv­ing fi­nan­cial in­clu­sion across In­dia, DHFL re­in­forces its com­mit­ment to­wards en­abling eq­ui­table and sus­tain­able growth.

How are you placed in terms of the gov­ern­ment’s goal of hous­ing for all by 2022? What are the spe­cific pro­grams you are pi­lot­ing in this re­gard?

Our pow­er­ful af­ford­able hous­ing propo­si­tion is pil­lared on our in­sight­ful ap­proach to­wards meet­ing the needs of the cus­tomer at the base of the pyra­mid. We cre­ate more op­por­tu­ni­ties for ‘Giv­ing In­dia a Home’ and en­able de­serv­ing peo­ple to live their most cher­ished mo­ments. In line with this ap­proach, we con­cep­tu­al­ized our cus­tomer cen­tric ini­tia­tive ‘Griha Ut­sav’, which is es­sen­tially a plat­form to con­nect mil­lions of as­pi­ra­tional LMI home buy­ers with de­vel­op­ers in the af­ford­able hous­ing seg­ment in small towns and lo­ca­tions. We crafted our Jan Awas Home Loans to cater to the af­ford­able hous­ing needs of EWS, LIG and MIG cus­tomers, with to­tal ease and con­ve­nience, in line with the gov­ern­ment’s ‘Credit Linked Sub­sidy Scheme’ (CLSS) un­der the Prad­han Mantri Awas Yo­jana (PMAY). Im­por­tantly, in a bid to cre­ate a ro­bust plat­form for en­abling home­own­er­ship for the In­dia that lives in tier II and III cities, we re-ori­ented our mar­ket­ing com­mu­ni­ca­tions strat­egy and un­der­writ­ing poli­cies to make it cen­tered on ex­pand­ing fi­nan­cial in­clu­sion.

What is your pres­ence in tier II and tier III cities? What is the per­cent­age of busi­ness in these lo­ca­tions?

We fore­see con­tin­ued healthy de­mand from the tier II and III mar­kets. Higher trans­ac­tion vol­umes in these mar­kets and fis­cal in­cen­tives on hous­ing loans along with more op­tions in the af­ford­able hous­ing seg­ment aided ro­bust off-take of the hous­ing fi­nance in­dus­try. As I said ear­lier, we fo­cus pri­mar­ily on the LMI seg­ment, which

is con­cen­trated in these mar­kets across In­dia, and we have de­vel­oped a busi­ness model and an at­trac­tive suite of prod­ucts to cater to this seg­ment. The busi­ness model is de­signed to fo­cus on this seg­ment in this mar­ket. A fac­tor that has helped us stay ahead in the af­ford­able hous­ing sec­tor is our large dis­tri­bu­tion and lo­cal­ized net­work in the tier II and III mar­kets. We main­tain a pan-In­dia dis­tri­bu­tion net­work in over 350 lo­ca­tions, which fur­ther ser­vices 450+ lo­ca­tions. A sig­nif­i­cant por­tion of our cur­rent sourc­ing comes from be­yond the ma­jor ur­ban cen­ters.

What is the av­er­age ticket size of the loans you sanc­tion? How could you avoid NPAs?

Hous­ing fi­nance com­pa­nies such as DHFL ma­jorly fo­cus on pro­vid­ing af­ford­able hous­ing fi­nance so­lu­tions to buy af­ford­able homes which are ma­jorly owned by the first home buy­ers. Buy­ing a home for the fam­ily’s se­cu­rity is a very big de­ci­sion in the life of an LMI cus­tomer and is not a mere in­vest­ment in­stru­ment. Our strong un­der­writ­ing skills and in­ter­nal ca­pa­bil­ity on col­lat­eral eval­u­a­tion, in­clud­ing the le­gal process, fur­ther pro­tects and strength­ens our as­set qual­ity. We have one the low­est NPAs in the in­dus­try - our re­ported Gross Stage 3 Loan As­sets (equiv­a­lent to Gross NPA%) stand at 0.93%. This is aug­mented by pro­pri­etary in­dices de­vel­oped on our in­ter­nal data­bases built over the last 3 decades.

Can you out­line the ef­forts made by the com­pany in cre­at­ing aware­ness about fi­nan­cial dis­ci­pline?

We con­duct sev­eral ed­u­ca­tional camps/ ac­ti­va­tions for po­ten­tial tar­get cus­tomers in tier II and III towns, to de­mys­tify home loans and cat­alyze the re­al­iza­tion of the peo­ple’s home­own­er­ship dreams. We also un­der­take fi­nan­cial lit­er­acy ini­tia­tives as part of our CSR pro­grams through var­i­ous me­dia.

How do you think en­act­ments like RERA have helped the hous­ing fi­nance com­pa­nies?

The im­ple­men­ta­tion of the RERA re­flects the gov­ern­ment’s steadfast com­mit­ment to bring greater mo­men­tum to In­dia’s real es­tate in­dus­try, which con­trib­utes very sig­nif­i­cantly to In­dia’s GDP and is the growth en­gine for eco­nomic de­vel­op­ment. RERA is ex­tremely ben­e­fi­cial in pro­tect­ing con­sumer in­ter­ests, in­creas­ing clar­ity, en­sur­ing ef­fi­ciency in prop­erty-re­lated trans­ac­tions, im­prov­ing ac­count­abil­ity of de­vel­op­ers, en­hanc­ing trans­parency, boost­ing con­sumer con­fi­dence. RERA is hence aimed at aug­ment­ing gov­er­nance, strength­en­ing the buyer’s trust, im­prov­ing flow of credit to de­vel­op­ers thus stim­u­lat­ing home­buy­ers in sev­eral ways. Its im­ple­men­ta­tion has been well timed and in due course it will emerge as a strong cat­a­lyst to meet the ob­jec­tives of Hous­ing for All by 2022 pri­mar­ily ad­dress­ing the sup­ply side gaps.

Can you talk about tech­nol­ogy in­duc­tion in the com­pany? How has it helped?

DHFL is mak­ing sig­nif­i­cant transformation in its IT in­fra­struc­ture to leapfrog to the next gen­er­a­tion of a scal­able and flex­i­ble tech­nol­ogy land­scape. The dig­i­tal ini­tia­tives will usher speed, ef­fi­ciency in day to day op­er­a­tions and su­pe­rior an­a­lyt­i­cal in­sights that will help us de­sign prod­ucts and ser­vices in line with the chang­ing cus­tomer re­quire­ments. It will also fu­ture-proof the or­ga­ni­za­tion, en­hance cus­tomer ex­pe­ri­ence and con­ve­nience. This trans­for­ma­tional strat­egy will help us im­prove pro­duc­tiv­ity, re­duce cost and en­hance cus­tomer ex­pe­ri­ence. We are mov­ing to­wards be­com­ing a dig­i­tal as­sisted cus­tomer cen­tric or­ga­ni­za­tion. We are cre­at­ing a unique in­te­grated ecosys­tem of dig­i­tal and phys­i­cal con­sumer touch points for our cus­tomers to seam­lessly in­ter­act with us in their pre­ferred en­vi­ron­ment, keep­ing in mind reg­u­la­tory needs and build­ing a qual­i­ta­tive as­set port­fo­lio.

Can you list the prac­tices you have adopted to make on­board­ing of cus­tomers easy and con­ve­nient for them?

There are mul­ti­ple ini­tia­tives which ad­dress the needs of pro­vid­ing en­hanced cus­tomer ex­pe­ri­ence, re­duced cost and mit­i­gat­ing oper­at­ing risk. We have built cen­tral­ized un­der­writ­ing hubs in Hy­der­abad and Mum­bai, which work on a scan-based, work­flow-driven plat­form. We have de­vel­oped ca­pa­bil­i­ties on auto mak­ing in­come doc­u­ments and bank state­ment eval­u­a­tion, in­clud­ing ac­cess­ing from source. We have adopted a GIS-en­abled mo­bil­ity tool for our field work­force across func­tions, which acts as pro­duc­tiv­ity en­hancer be­sides re­duc­ing turn­around time dras­ti­cally. We have im­ple­mented bu­reaubased al­go­rithms for ver­i­fi­ca­tion and fraud de­tec­tion in­clud­ing be­ing a pi­o­neer­ing HFC in cre­at­ing score-based de­ci­sion­ing mod­els. Some of the other ini­tia­tives in­clude video-based per­sonal dis­cus­sions, desk­top val­u­a­tions and le­gal pro­cesses aimed at tap­ing in­creas­ing dig­i­ti­za­tion of gov­ern­ment doc­u­ments.

Vivek Kan­nan out­lines how tech­nol­ogy ini­tia­tives are fu­ture-proof­ing the or­ga­ni­za­tion